. >> good morning, everybody. i'm becky quick along with joe kernen. andrew ross sorkin is in new york city, reporting from iac's headquarters. the company's well-known chairman barry diller will be joining us live with andrew from there for an hour starting at 8:00 eastern. iac closing its acquisition of ask.com just yesterday. we'll talk with doug leeds. a number of other newsmakers joining us. there are now just 40 days until the election.first debate is next week. so politics front and center. among our newsmakers this morning, do that anald trump whe phoning in at 6:30. and we have jeb bush and eric cantor will also be joining us. there are 90 days until christmas and toys "r" us is

announcing it's hiring 45,000 seasonal workers. the ceo will be joining us with the details at 6:50 eastern time. plus the story everyone is talking about this morning. a botched call ending last night's game between the packers and seahawks. the season has already been marred by bad calls. and no calls from nfl replacement referees. but football fans say that last night's game could be the moment that actually makes the league get a deal done with the refs. if you went to sleep early, here's what happened. the packers led 12-7 late in the fourth quarter. on the game's final play, seattle quarterback russell wilson lobs a hail mary pass towards the end zone. and it looks like green bay's jennings makes a game saving interception, but golden tate wrapping his arm around jennings in an attempt to wrestle the ball away. but one official signals a touchdown, the other signals an interception. and after a mad scrum, the ruling is touchdown. now, there were multiple replays.

and then referee wayne elliott came out and said the ruling on the field stands. so seattle wins the game 14-12. twitter immediately lights up. let's get on just a few of those. first up, if the nfl replacement refs were judging the revolutionary war, we'd all be british. and drew bledsoe tweets if the existing refs wanted leverage, they have it now. troy aikman says these games are a joke. we'll have more on the game and the controversy throughout the morning. joe, back over to you. top corporate headline, caterpillar cutting its earnings guidance to 12 to 18. world's largest maker of earth moving equipment warned of a bigger than expected fall off in demand over the next few years because of weaker commodity prices. but caterpillar stopped short of forecasting a global recession.

shares falling on the news. a brawl yesterday involvinged 20 workers, foxconn refusing to say whether it would affect production of the iphone 5. >> we need andrew here, because i don't know anymore. >> apple has a three to four week backlog of online orders for the device. red hat reported weak that expected earnings. it's also lowering the top end of its full year revenue outlook on slow growth in its service

businesses. >> came we have the case shiller index. that's release the at 9:00 a.m. and then at 10:00, september consumer confidence. the fhfa house price index and the richmond fed survey. and john williams says he expects the central bank to expand its bond buying program next year and end it before the close of 2014. he's arguing that it will take more than a few months for the latest round to drive down the high unemployment rate. therefore he's suggesting that there is good cause to ratchet up the fed's already aggressive measures p wi measures. williams voted for the stimulus. a check of the markets. yesterday it closed down slightly. take a look at what's happening in europe.

you'll also see slightly lower. not major moves around the region. hang seng up by about four points. kospi pi down by about 12. oil prices, this has been a big changer. yesterday the transports finally turned up after a horrible week of trading. a huge swing may be the thing that actually helps out some of the transports after all the lousy news we heard started off by fedex and the warping it gave. if you take a look at the ten ye year, pushed below. the dollar is up against the euro and the swiss franc. down against the yen, but euro

trading at 1.2907. gold prices which dropped pretty substantially yesterday morning are up you just absolutely today, $2.90. wilbur ross plans to take part in the china share gas tender open to foreign investors. he'll team up with u.s. natural gas firm, china believed to hold the world's largest reserves of shale gas. and spokesman for mitt romney says the obama administration should formally their china a currency manipulator. semiannual report due on the topic released by treasury in mid october. >> it had stopped for a while and yuan was slowly moving up,

but then with all the pressures with their economy, it's kind of turned around. >> when you start messing around with china as a political football on either side, election nearing and -- >> and tensions between china and japan got pretty bad. i heard the lexus is going to be slowing down production because wealthy people don't want to buy a japanese luxury sedan. >> a lot of people that were wealthy aren't quite as wealthy as they used to be. i think trump was always railing about china, too. >> in other news out of washington, the white house is reportedly prepare to go direct federal agencies to develop guidelines for owners of power, water and other infrastructure facilities. it would give the agencies 90 days to propose new regulations and create a new cyber security council at the department of

homeland security. and president obama will be addressing the general assembly of the united nations today. this is a video of his last appearance in 2010. zun says 18,000 people have been killed since the uprising began in march. >> and kelly evans is standing by in london. what's going on this morning, kelly? >> it's quiet because we're waiting on the end of the week. thursday, friday, that's when we get the spanish budget and hear from the french. credit strategists saying some of the soft cores are looking vulnerable. but the bottom line is stoxx 600 just slightly to the negative this morning. want to show you a couple stocks in particular weighing on the index. continental down more than 4% after an offering priced towards the low end of the range indicating people aren't buying into the dip. standard chartered a laggard.

temasek may be selling down some of its stake. the wall street journal telling us this morning, though, not so fast. those shares up more than 3%. and in the wake of caterpillar's pr profit warning, that has made sentiment negative across the globe. if we look at the sectors within the stock 600, we can see industrials are among the underperformers. so, too, are banks. autos, as well. food and beverage is bucking the trend. we did see spain going market offering 12 month debt but paying a little more than it did at the end of august. there are questions as to whether that was the low point. spanish ten year like the rest of the curve is selling off a little bit today. yields moving up to 5.76%. italy is nearing 5.2%. although it was able to get a better rate for debt at its auction this month. this rotation is benefiting bund and gilts. we're seeing, though, levels

consistent with what we're seeing in the u.s. this morning where down back below that 1.7% on the ten year. a quick look at the euro-dollar. again under pressure thorn. not hugely so, but down about almost a quarter of a percent. and 1.29011 what we' is what we now. we're seeing risk off sentiment across the board and u.s. futures when we first checked in earlier this morning looked okay and now they also appear to be coming under pressure. angela merkel is speaking to a german business group bdi talking about how it's not going to be euro bonds as far as she's concerned, but we'll watch for more comments as she is still calling for more ire rop. mario draghi speaks at that conference at 3:00 central european time, so that should be 9:00 a.m. where you guys are. >> okay. we'll be watching. when we come back, more on the call that everyone is talking about this morning, that crazy end to last night's nfl game

sparking new outrage about replacement refs. but mary thompson joins us with a new ad campaign on wall street. >> morgan stanley wealth management launching a new ad campaign today, but will this unit also launch a bit earlier than expected? we'll have that story coming up after the break. [ horn honks ] hey, it's sandra -- from accounting. peter. i can see that you're busy... but you were gonna help us crunch the numbers for accounts receivable today. i mean i know that this is important. well, both are important. let's be clear. they are but this is important too. [ man ] the receivables. [ male announcer ] michelin knows it's better

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welcome back. up 13 points on the dow as you can see. in squawk sports news, crazy end to the seattle/green bay game. packers led late in the fourth quarter. final play, russell wilson lobbed a hail mary pass towards the end zone. and you can see that jennings makes a game saving interception. and then seattle's golden tate wraps his arms around jennings in an attempt to wrestle the ball away, but wait a second, one official signal as touchdown and the other looks confused and looks like he's signals an interception. the ruling is touchdown and then to reverse that, i don't know, something in the rules makes that difficult. >> a much higher bar. >> green bay, i don't know, i would have scored more points

than 12 so it couldn't have happened. >> but can you imagine how frustrating? some of the calls that came in -- i'm not somebody who knows all the rules and i was kind of stunned would i some of tby som. >> we asked commissioner roger goodell about replaced refs a few weeks ago. >> we're concerned about protecting the integrity of the game and making sure the right calls are being made from a safety standpoint. when we went through this in 2001, we had less call during the game and actually the coach, fans and the players actually liked that because they weren't on the knit pecky calls. it will get resolved but we're prepared to go forward if we have to. >> he may be thinking differently this morning. there's been -- >> i think after this, a lot of people will be thinking -- >> it's not just this call.

you've seen the calls that have come through. >> people have to be getting restless at this point. >> shih tzu happens. >> they put that on the front page? >> if they can do that in the post, we can do it. but it's tough to help help that's a dog, shih tzu. >> yes, i know. >> you take referees for granted a lot of times. >> it's interesting because he says from a safety standpoint that's what they're but when you see a call like that and there's confusion on the field, it could have implications on the playoffs down the road. fans and players and coaches will be enough already. >> and the nfl has a sterling reputation. they are the premier league of all leagues. something like $9 billion for the broadcast rights. >> it's early in the season. >> three games in.

and if you're a green bay fan -- >> october is coming. and the reds get the best record -- i'm not even thinking about football. can we finish that season, please? >> i'm a red sox fan. >> you want over. it already is over for you. you can move on. >> i was born in boston. i tell people it's like being catholic. if you're born this boston, it's like they baptize you, you're a red sox fan. >> it was a curse for a while. there's other sports news apparently. bcs conference officials have identified a candidate cities to host the first championship game in college football's new postseason system. the four among the choices, fiesta, rose, orange and sugar

are better to enter an exclusive negotiating period and the georgia toem in atlanta and dallas cowboys stadium would also be considered. and are you you starting to -- >> no. >> because i watched and notre dame won and they beat michigan. i won't jinx it, but they weren't -- did you notice a little trouble moving the ball? >> yes. i noticed the offensive line got pushed around. >> they looked small, too. and if they didn't have that one hawaiian dude. >> played an amazing game. and he lost his grandmother and girlfriend within a couple of hours of each other last week. and so everyone was wearing lei in the stadium. >> you know, you're very good here. >> as long as we're talking sports. >> but it's nice to have someone sitting there that can talk about sports. and in baseball, the rangers

rallying past the as 5-4, but the reds will win it all. oakland has lost section of eight. >> let's get to today's weather forecast. alex wallace joins us there the weather channel and i finally listened and the coat was useful. >> 48 degree. >> it was cold. >> see, there you go. just check with us before you head on out and we have you covered. here in the midwest, if you're watching, you have rain to deal with here this morning. so get the umbrellas ready. right around springfield, south of town heavy down pours to deal with along with the heavy rain. also quite a bit of lightning to contend with, as well. so if you're waking up, probably thanks to the thunder here that is roaring in these areas. all thanks to a storm system right here in the middle of the country. this is the one that we follow the next couple days. again, right here in the blaines. midwest as we work our way in through the next few, it will track its way into the northeast. so for today, midwest, ohio valley dealing with the threat for showers and storms.

tomorrow as it heads towards the northeast, it's the northeast turn now to deal with it. new york city, boston, trailing back along our front back towards st. louis, the threat for storms for the mid week. how much rain will we see? not a ton, but there will be areas picking up anywhere from an inch maybe a little bit more than that in local spots. evansville back up to indianapolis and this is through thursday morning. and then we lighten the amounts as we head off towards the north and east. so about half an inch possible around pittsburgh. warming temperatures. a lot of areas across the south started off for the weekend early week in the 70s. well, now we're seeing 80s and even 90s. so feel something warmth here even though we have officially entered in to fall. by wednesday, mid-80s and a few 90s, as well. guys, back to you. >> aim not finishi'm not finish yet. it was a shocker. last year do you remember quhapd in october last year? >> yeah, a snowstorm.

>> and so all the leaves, power lines came down. anyway, send up -- we don't wear about 80s. 80s will be good. it was only 48 this morning. morgan stanley is wlaufrnling a n launching a new ad campaign. smith barney name now part of wall street history. used to work for them at one point. as morgan stanley -- smith barney becomes morgan stanley wealth management. in an exclusive interview with mary thompson -- oh, no, you had an exclusive interview with greg fleming. talked about the new campaign. welcome. nice to see you this morning. >> thank you. >> we had you on earlier talking about sports. >> we did. so now i'm back to talk about business. >> you can do it all. >> you can me, i'll go cover a hurricane, too.

politics is still -- i wouldn't -- >> i don't really understand that. you're at a business channel for god sakes. >> let's talk business. after a three year effort, greg fleming who runs morgan stanley's wealth management group says the campaign, ad campaign, is to show clients and brokerses that they are all part of the same team. it's a team fleming wants playing on the same field as soon as poblg. morgan stanley has until june of 2015 to buy the 35% of the brokerage it doesn't already own from citi. it's unlikely to wait that long. what advantage would it be for you if you were able to acquire the remainder of it sooner? >> i think the time frame that james is focused on is sooner than 2015. maybe next year. the issue for us on something like this, and this is true for any institution, you have regular capital reviews with regulators and you need to get the regulators on board.

but for james looking across the firm, this is at the top of the list of priorities and we'd like to see it happen as soon as possible. >> so when more began stafw cou request to buy the remainder by june of next year? >> absolutely could. >> coming up, we'll get fleming's take on what happened with facebook's ipo and whether or not it hurt the morgan stanley brand. >> that is a great tease. give us a little bit. >> no. you have to watch "squawk on the street." that's it. i gave you my opinion about the nfl refs. >> you have to give us a little bit. >> it's an art, not a science. >> who does notre dame play this week? is miami any good? >> i think they have a bye this week. they're playing miami in chicago on october 6th. once a year, they do a game in

an away venue. and i went to ireland, yeah, but they've done -- they did it in san antonio. they want to do a home game in another area where a lot of their alumni are. >> they have to start winning, though. there was an espn poll, something about how every age group, something like 12% of the population are more who say they're notre dame fans until you get to the 12 and under where it's 1%. >> why would they. they haven't been a major player. >> i tried to remember all the coaches since lou holtz. jerry faust -- >> jerry faust was when i was there. >> charlie weis. >> forgot about him. bob davies. this guy might be the real deal. cincinnati was awful, terrible, and they were almost -- >> that's why you're paying so much attention to this.

>> it is. i kind of like notre dame. i guess. i was raised catholic. >> and we will definitely watch "squawk on the street." when we come bakcome back, how money do americans plan to spend on halloween? a survey has a few answers right after this. plus the squawk news line is ringing. we'll answer a call from donald trump. politics and china on our agenda. [ male announcer ] for the saver, and a big first step.

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when you call 1-888-280-0149 now. optionsxpress by charles schwab. good morning. andrew ross sorkin is reporting from new york this morning. he will join us with a special guest from iac, chairman barry dill

diller, from a weird looking building down there. right across the street from the hustler strip club if you don't know new york. >> interesting your choice of landmarks. i was thinking west side highway. >> mac, you said it's right next to the hustler, right? didn't you? i've never been to either one. >> we drove down west side highway the other day and i said that is the most ridiculous looking building. i can't believe they put it there. >> you noticed it? >> i noticed it. >> i don't know anything about it. mac was -- anyway, making headlines, caterpillar is cutting its -- see, i got confused. what year is it now? >> right now? 2012. >> it is, right. okay. the company's cutting 2015 earnings guidance.

i don't know about 12, 13 or 14 but if you're thinking about 15, they now see 12 to 18 dollars a share. world's largest maker of earth moving equipment warned of a bigger than expected fall off in nand for its products. how they could possibly know that commodity prices will be possible weaker, that i don't understand. >> they're getting in to mining, too. >> i don't know what they are talking about. they did stop short of saying global recession. amtrak is running a test of high speed trains along the northeast corner this week. test runs at up to 165 miles an hour in four stretches from maryland to massachusetts. same locations could be boosted to 162-mile-an-hour service. >> 150 right now.

>> i don't ever feel like i'm going -- >> a lot of times where you get slowed down by a train in front of you. always an issue of if the train's on time unless there's a slow -- >> i'm all for that. top speed now 150, but i don't really ever feeling like i'm going 150. >> you feel it when you're leaning up against the window and another train flies by. >> 170 million people will dress up, celebrate and spend up to $8 billion on this halloween. my favorite holiday because it's penelope's birthday. so we never need to celebrate because we're always dealing with the kids. unfair. 7 in 10 will take part.

i love halloween. don't you? >> i do. do you know what you'll be, what the kids will be? >> we don't though yet. super hero anybody involved. >> we have hunger l eer games g and a lion. both of the girls will be characters from the if you thinker games because that's the big thing going in our house. >> do you know if they ever made a donald trump mask or hair or -- >> that would be impossible. >> first presidential debate is next week. joining us on the squawk news line, donald trump. there have been people dressing up as you on halloween, i'm sure, as eye icon. did they ever actually manufacture a costume, do you know? >> they did, and a mask. and actually the mask was much better looking than i am. so i always loved it.

but it was a very good selling mask, i will say that. but it was a beauty. >> donald, i keep reading about this awful, awful week that romney had and it's just weird. i don't know how the polls work, whether they're leading, lagging, coincident indicators. but i remember with gallup, it was down four are or five and by the end of this awful week, he was down one or even. who am i supposed to believe? can i trust what the media tells me about this election? >> well, you can't believe the polls because they're all over the place. some have him leading, some have him despite the fact that it was not a great week, but some of the polls went up. with a month and a half to go, it will be very interesting to see what happens. mitt will have to get very tough, be very smart. because they're being vicious p. it's sort of interesting. anytime you say anything about obama, they immediately say how dare you say that, we want a retraction. i just don't get it. we should not be doing retractions.

the guy's run a terrible presidency and we'll see what happens. and as far as china, you were bringing china up, when you talk about a currency manipulator, mitt's 100% right on that. and obama thinks it's terrible that you talk that way. china's just eating our lunch. >> we have two more jobs reports. i don't know how those come out. supposedly you you can't make assumptions that would make things look better. i have seen the participation rate going down and down and down. if you added back all the people that have left the workforce because they're retiring, baby boomer, if you add them back in, we're at over 11%. so we've got that on the economy. and now we've got suddenly the middle east and foreign policy, that used to be something that the left thought they could count on being a strong point and i'm wondering whether there's some question now whether that becomes a liability. >> joe, the real unemployment number is over 17%.

when you add back the tremendous numbers of people that gave up looking for jobs and all of the other things they do to manipulate them, you're not talking about 8.2%. you're you can taking about the real number being over 17%. and i don't think there's even a little bit of a question. if you look at what's happening, apple, we all talk about apple and we watch the stock go up, although yesterday it finally had a bad day after about 400 years. but you watch this whole situation with apple, china is the -- they're the ones that make the product. we don't make any apple product. and they talk about how it benefits us. but china makes the product. china is the beneficiary of apple. we're not so much of a beneficiary. so we have to get the jobs back in this country. we have to take those jobs away, incentivize companies including apple so they build their packer tos factories in this country. >> getting back to the whole 47% notion, as clumsy as it was

stated, sooner or later, if you just -- if we were to summarize this, someone saying you can keep it all and i'm not going to raise taxes, you can keep everything that you'reetti and i'll make rich people pay for it, and then you've got the other side saying there's going to be some things that happen here that not everybody will be able to keep everything, sooner or later it seems like it will be tough to get elected if you're the latter. >> well, that's true. and it's a big group of people you're talking about. but eventually our country was built on a certain basis. and it wasn't built on the basis that you don't have to work and you can receive whatever you have to receive. the fact is we were created as a group of people that gets out and works and works very hard and were doing a good job. it was brought up, whether it should have been or not, who knows, it may have ban an asset

in disguise. it may have turned out to be a good thing for mitt romney. but he has to grasp it and go for it. he has to grasp it and go for it. and many, many people believe that what he said is correct. >> donald, did you see the "60 minutes" on sunday night? >> yes, i did. >> what did you think of mitt romney's performance? >> i thought his performance was absolutely fine and i thought the president was fine. but i thought the questions to mitt were a lot tougher. i thought the interview was a lot tougher. which i'm not that surprised about. >> we've seen 45 years of that. you've seen the -- >> i thought his answers were good answers. >> very good answers. i think he did excellent. they both did very well. no great surprises. remember one thing about mitt. mitt was really doing poorly and he had to go to florida and if he did didn't win florida, it was going to be over. and he went to florida under great pressure and great stress, went to florida, won two debates

against newt and others, but against newt in particular who is a great debater as we all know. he actually beat him and rather easily. he won the state. and i told him, i said that was the best political week you've ever had. and now if he can do that again in the debates and especially the first one, i think he'll do great because this president should be down at least 10 to 12 points based on his performance. >> i've seen steve kroft interview obama a couple times. if you want to grill him from the left and say you haven't followed through on you will at things that the left wanted, you've been a disappointment from the left, that's what you get. think if he was interviewed by someone from a conservative. >> i thought steve kroft it okay. >> did he say it's not what you haven't been able to do, it's what you did do?

>> i think steve kroft is terrific, but i to think mitt interview because tougher. >> it's cbs. i heard nothing about -- are you responsible for some of the divisiveness? the way obamacare was handled the first year and a half when the economy's obviously the thing you should have been focusing on, what ushered in the tea party in 2010? >> he had all the of the cards on his side. all of the votes, key have gotten whatever he wanted. all of the tax things passed. instead he focused on obamacare and now he complain that's can't get anything passed. >> the intro with republicans have stood in your way oefrg you've tried to do for past year and a half. but i'm not surprised. all the way back to nixon/humphrey. >> you have to remember for two years key hahe could have done

whatever he wanted with congress because he had the majority and he didn't do it. >> the economy will come back on its own. we need to transform health care. that's -- paying the price. >> you're 100% right. >> thank you donald. >> thank you very much. when we come back respect our next guest is just back from china. we'll ask about currency manipulation, growth and much more. this country was built by working people.

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weighing the global economy down. at the center of them clearly we see uncertainty. you were certainty about what policymakers can and will deliver on their promises. and this is having not tangible but real effects.

increasing divergence much economic fortunes and a tepid recovery. >> that's christine lagarde urging european leaders to take action and deliver on promises before the debt crisis deepens. mark grant of southwest securities joins us on set this morning. and mark, you have been someone who has kept us up to speed on a lot of things behind the scenes in europe. you're just back from china. so why don't we start off with what christine lagarde is talking about right now. >> well, you're seeing a huge slowdown, the exports from china, the export there is japan to europe are almost -- you're seeing europe in an absolute recession p c recession. china is slowing down hugely. i project a 4% growth rate down from 8%. visiting with a number of money

managers, they're saying i may be optimistic in my viewpoint. so you're seeing an absolute wall, if you will, in china. so you have two of the three biggest economies, european economy and the asian economy slowing. i think america by the first quarter 2013 will also be in recession. >> and yet the stock market has really hung in there with all of these problems, fiscal cliff, with anything you can throw at it. part of it has to be with what the fed is doing. >> very hard to fight the fed. the fed keeps putting liquidity into the system but it doesn't solve the solve issues here. it takes a while until you get to the real difficulties. >> williams thinks it will take a while for the qe-3 factor to really slow down unemployment and really put a tent in to it, but he's looking at next year end of 2014 by really seeing a much better picture.

>> i think and he is more optimistic, he works with the fed, than i am with a singular view. but as i look out into the future and maybe somehow in terms of the economy and unemployment, but you also have the housing issue which i think they focus on but don't talk about. and the other issue with all this is the fiscal cliff that's coming up. and then you've got the reverse side. there's a consequence of all this which is probably going to be a rise in the price of oil and the fundamental basis and other assets like steel and commodities. that will drive the price for regular gas at the pump up over $4. >> the weird thing is oil prices have come down about $8 over the last week or two, which is very strange when you see qe-3. a lot of people expected that price to get pushed up ahead. it's done the exact opposite. >> i think there was the expectation of what was coming. we kind of came off with the

profit taking and now we'll head back up on the other side. >> ran up to almost 100 with the iae saying well supplied and demand is down. but if you think that there will be such a big slowdown, why do you think that oil is going back up? >> because i think they're going to be -- qe-3 which is putting all the liquidity back in the system will drive -- >> even if we're in recession here and europe is slow and china is weak. >> i think we go up for a while until we hit the recession and then we go back down. so you're looking where on the time line you want to look. >> 2012 supposed to be the year when it all hits the fan and there's not a lot of time left. it's september. but the middle east is suddenly heating up a little bit and there are -- europe would have to get significantly worse. china would have to -- they have even harder landing.

you know this guy? the world was ending. >> every time i hear somebody talk about armageddon, i don't care who it is, i've been on wall street 38 years, you'll always get through somehow. >> we'll kuwaait until the 1,00 tidal wave. that really will be it pup toys "r" us retailer ce off the joins us next. let's -- let's start over from the beginning.

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♪ ♪ it's the most wonderful time of the year ♪ getting earlier and earlier. this is september, isn't it? >> get ready. >> this guy, he's all for this, gerry storch, toys "r" us is announcing it's hiring 45,000 seasonal workers for the holiday season. gerry storch, it's not too early to start talking about krchris s christmas? >> no way. three months away. >> you hire 45,000 seasonal employees. that's up from 40,000 last year but not necessarily because the economy is any different or the external things are different. you have some new stuff like buy online, pick up in store, so you're thinking that some

internal things toys "r" us has done will require more guys. >> our hiring up is because of innovation, we added free layaway, hot day reservation, because you can reserve any toy on our top 50 list between now and halloween and we'll find it for you, we'll guarantee you'll get it. >> that means i need to know what the hot toy is. >> the hot toy list was published last week. >> you didn't bring any because we told you not to bring any. >> they said they wanted to make sure we had a good business on the hiring we're doing. the other reason for the employees is because our stores are becoming mini distribution centers for the internet, becoming little internet pods. >> why can't i just get it shipped to my house? >> you can if that's what you choose. for a lot of people it's better to go to the store because you get the immediacy then, no shipping charges, always free when you which can it up at the store. other people want to make sure that they can buy anything in the internet assortment and go to the store and pick it up.

>> you don't want to take the risk of showing up at the store? >> my wife gets sticky notes on the door from federal express and annoys the heck out of her, made a couple of attempts to deliver something. next time they'll send it back. you can order it online, have your husband pick it up on the way home to work, vice versa, you could have a relative pick it up in san diego. the world's evolving. the internet is transformational but it's not just the exclusive playground of internet only companies. in fact it's the stores that are going to win in the end because of the physicality. everything that's going on in the internet is about mobile and about physical, the ability to see what's going on in my neighborhood and act on it immediately. because more and more people are coming to the stores to receive their internet purchases, we need to have people in order to make that happen. >> last year, out of the 4,000 -- 40,000, 15% retained positions, that's 6,000 people.

you didn't hire 6,000 people. are you going to hire 6,000 people every year? >> if you want to get a job g to work, have a retailer seasonally, someone like toys "r" us, great retailer and the 15% understates the percentage of seasonals who wanted work over the holiday. go to toys "r" us, sign up now, do a great job and we'll have you next year. >> you have more workers now than a year ago, is the economy in a position where you're hiring people permanently? >> we're adding new stores and the services require more people, free layaway, we'll fulfill the promise. >> give us one hot toy. >> dr. stuffins is hot for the girls. teenage mutant ninja turtles are back, sewer lair playset at toys

"r" us. >> we appreciate it. >> bring him back.

former florida governor jeb bush talks education reform and how to get the economy back on track. >> it's your money, your vote. house majority leader eric caber on presidential politics and what congress can do about boosting jobs in america. plus a look at what is next for iac interactive. andrew is there with more as the second hour of "squawk box" begins right now. ♪ welcome back to "squawk box," everybody. i'm joe kernbecome becky quick

kernen and andrew ross sorkin. former florida governor and founding member of the project for the new american century jeb bush will be here to talk education reform and the economy. at 7:30, house majority leader eric cantor on taxes, jobs and economic growth and andrew is in new york this morning and has something special lined up for us. good morning, andrew. >> hey, good morning, becky. we have an exclusive interview this morning with the original disruptor, barry diller, of course, the chairman of iac, we are here at the iac headquarters and take a look behind me, we have a remarkable screen, we are here sort of in the lobby, if you will, and it's an amazing scene right now. barry is going to be coming up to talk to us at 8:00 a.m. eastern time this morning, i'm going to go back to this camera. iac owns match.com, ask.com, barry diller trying to revolutionize the tv business,

facebook, the book industry, and a whole lot more. i'll send it back to you, joe. >> all right, andrew, you're in, how do you describe that building, that frank garry thing? >> it's a frank garry building on the west side highway across from chelsea pierce. you hit some golf shots there. it is a gorgeous building. when you look at the lobby we're in right now it's pretty remarkable this screen. we have our big screen at cnbc but this one may take the cake. >> very good. we'll be back with you short will i. i forgot you were there and was thinking it's just about 7:00, it should be, andrew should be here any second, about 7:00, that's his n schedule. >> i was looking at the time, i slept a little late, it was good. >> you never really updated everyone that lame thing about the pillow falling on your blackberry muffling -- you never really updated people that that

wasn't what happened. >> well, no, no, the pillow did fall on top of -- >> but it wasn't set. >> i realized over the weekend -- no, no, the blackberry was set. >> it was a new -- >> but it didn't go off. this is the problem, we're going to talk to barry dilller iphones and apple and the future of all that so maybe i got to get rid of the blackberry. >> the first excuse didn't hold water and now i see you're sort of dancing around, he's got these other. fill us in, get your story together, though, all right? he was down there, he was scheduled to be down there today. thanks, andrew. the futures today indicated slightly a little bit lower, i think, and now it's up 17 points or so after a flat session yesterday for the most point. caterpillar is cutting its 2015 forecast, seeing a bigger drop in demand of earth moving equipment because it sees weaker commodity prices. the ceo says economic growth is

slowing more than the company expected and as a result caterpillar is in the dow and we'll see whether that affects the average. fox comresumes production in china after a brawl. you'd want to have that on tape. >> i saw some pictures afterwards of them kind of being led out. >> amazing. forced to close for 24 hours, the factory makes components and assembles iphones, the incident is sparking fresh controversy about labor conditions at the plant. google chairman eric schmidt says no decisions have been made about google maps that would work with apple's new operating system ios 6. google replaced it with its own when it rolled out the ios 6 and consumers say the google version

is far superior and apple version is like a work in progress. >> i've seen a lot of pictures of the golden gate bridge, brac lin bridge and martha's vineyard, didn't look like great maps. >> right. cnbc's all-america survey is out, a pulse of america you can only get on cnbc. one of the biggest questions, who will be better for the economy over the next four years. steve liesman has the answer to that burning question and much more. >> thanks very much. we went really in-depth on this issue of better and worse off over the past four years and who would be better over the next four years. the summary here, 9 of 12 categories, economy, jobs, housing, americans say they are worse off than four years ago but surprising by on 7 of 8 categories, americans say obama is better than romney for the next four years. let's delve in and show you the numbers. first on the economy, 55% of americans saying they're worse off than four years ago, 27% better, 17% say the same.

come on over to this side, 43% say obama's better for the economy compared to 34% for romney. we're going to get into some of the reasons why that may be true, a big reversal from when we asked about the economy in the last survey. this is a survey of all adults where it's a financial and economic survey. it's not a political survey so to speak so the results may not be comparable. on jobs, 23%. 29% say worse. obama 42% better on jobs, romney 36%. let's rotate the thing, it rotates that way, health care, obama's signature issue, 23% say better, 44% say worse, 28% the same. you can use better and the sames not worse. health care, obama 45, romney

32. perhaps there's inroads romney could make on the meter which is about in the 10% to 15% range. the deficit, the one issue of the eight categories where romney wins it but look at the huge margin. 73% of the public says it's worse than four years ago. flthis side, romney has a slight edge thank you for going backward, brian. one other issue i want to show you here, america's standing in the world, a lot of talk with the u.n. and issues of foreign policy, overwhelming margins americans think our standing in the world is worse than it was four years ago. flip on over, who is better? obama, 44-32, again, romney's support never goes above about 38% but that neither remains around 10, 11 or 12%. i want to show you the three categories where americans say things are not worse, stocks, 34% say things are better than

they were four years ago, that's really interesting. i'll get more into this at 10:00. the s&p over the past four years is up 80% but only 34% of americans say their stocks are better. wages are even, 28% say better, 28% say worse, 42% say the same and this one, i thought this was interesting, personal health care access, you can say this is a success for obama or you can say it's a huge failure in the sense that we've had this major overhaul and only 3% say that their personal access to health care is better and 55% say it is about the same. guys, coming up at 8:00 a.m. on our political results we'll che delve into the issue of why romney may have lost the lead on the economy, he was ahead in june, what some of the pollsters are saying about it and interesting demographic data about the divide in this country, not just republican/democrat but white and non-white and what's happened to those demographic groups over the survey period.

guys? >> steve, we are scratching over our heads over results, people saying this on one thing and change their mind on the other. explain that to us in the next hour. we're interested in hearing the back story. billionaire investor wilbur ross plans to take part in china's first shale gas tenders, he'll be teaming up with xco and a china partner. china is believed to hold the world's largest reserves of shale gas. president obama will address the assembly of the united nations today. this is video of his appearance in 2010. the conflict in syria is expected to be high on the agenda. the u.n. says 18,000 have been killed since the uprising began in march. a season damaged by bad calls from nfl replacement re if, s, see the end of monday

night's green bay/seattle game. the packers were ahead, late in the fourth quarter, hail mary thrown by russell wilson, towards the end zone and looks pretty clear that green bay's m.b. jennings made an interception, game saving, and then seattle's golden tate wrapped his arm around jennings, one official signaled a touchdown, the other looked like he's signaling an interception, after a lot of running around the ruling on the field was confirmed as a touchdown and multiple replays showed the wrestling match for the football and referee wayne elliott came out from under the hood saying the ruling on the field stands and seattle won the game 14-12 and that will be long discussed and disputed for a long time as it is whenever there's a question as to whether someone really -- it happens in a lot of bowls from time to time. >> but there's been a lot of

questions with the fill-in refs, making people saying is there a point where the nfl says we have to settle this dispute. still to come more on the controversial call in last night's game. next up, governor jeb bush. americans believe they should be in charge of their own future. how they'll live tomorrow. for more than 116 years, ameriprise financial has worked for their clients' futures. helping millions of americans retire on their terms. when they want. where they want. doing what they want. ameriprise. the strength of a leader in retirement planning. the heart of 10,000 advisors working with you one-to-one. together for your future. ♪

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welcome back. we've been keeping an eye on the future this is morning and right now, futures are slightly higher, dow futures up by about 26 points, s&p up by just over 2. nbc focusing on education this week with its annual education nation initiative. joining us, former florida governor jeb bush and chairman of the foundation for excellence in education. governor, always great to see you. >> good morning, joe. >> looking at some of your bullet points here and this is one that we want to start on, accountability and measurement, if we try to get these standards and you want to have some common core standards in effect, implemented by states, not necessarily by the federal government but you need accountability and measurement and you point out things that are accepted and all other circles, in business, are still controversial in education and

the status quo continues to be protected and as you raise expectations you're going to get pushback. what happened in chicago, governor, did the good guys win there in terms of getting accountability or did the, once again did we have to sort of fold for this status quo? >> i think at the end of the day the only measurement that matters are whether kids, students in chicago are getting a year's worth of knowledge in a year's time and at the end, the expectations are high enough, the standards are real enough that they can live an independent life. so it's hard to tell whether this agreement will yield that. i think chicago has an adult centered system completely focused on the economic interests of the adults. the whole shift needs to be about how kids can gain the power of knowledge. we're losing social mobility now. if you live in poverty the chances are you'll stay in poverty and that's shameful for a country like america that is, that really prides itself on being dynamic, so it's a broader

issue than just whether the adults get a little bit more money. >> i was watching one of our segments yesterday and had the former intel chairman, someone else was on. >> greg barrett. >> i kept hearing charter, charter, charter, walter isaacson, and i kept hearing charter, charter, charter, is that a big part of it, governor, or are your efforts -- not everybody can go caharter. >> if you provide more choices, i would argue both public and private, all schools get better. florida has the most ambitious school choice programs in the country, both public and private and our traditional public schools get better. you need that tension of competition and if you empower parents particularly that have no choices with other options they'll take it. i would add that another new element of this array a menu of choices needs to be digital learning. principally blended learning but we should blur the lines of kind

of governance and focus on can students get a year's worth of knowledge on the things we think are important every year in a year's time, and if they do that, are we preparing them for college or a career? right now about a third of our students really achieve that objective and that is just not acceptable for a country that wants to be competitive. >> but governor, how do we measure that, if they're getting a year's worth? that's been part of the union's pushback, you spend too many days testing and the standardized tests don't always show the best results. >> no one suggests we should teach to the test but we should teach to standards and the standards should be fewer and higher, they should demand critical thinking skills and the assessment tools that exist should be diagnostic so you can help remediate going forward, i'm not saying we should obsess about testing but if you don't measure, you don't care. the bottom line is no successful enterprise in life can survive

without measuring where you stand. >> are we spending enough per student now to, you know, have this new digital curriculum, governor? >> yeah. >> we are? so it's not must be. >> we spend more per student than any country in the world, more than any country in the world. >> it's something else then and i hate to keep coming back to it, and we're all afraid, because people, i love the teachers that my kids have, but i'm not a big fan of the union leaders, and the way that the unions keep power by taking dues and giving them to the politicians that will allow them to continue the status quo. isn't that really what we're talking about here, governor? >> it's the unions and the people that they negotiate with are adults, and most of the arguments that they have are about adult-centered things, like how much money can i have, where can i work, can you lay me off, who gets laid off first, can i be fired for incompetence, all of the issues are important for adults but what's important

for students we have a dropout rate or non-graduation rate of about 33% in our country, about half of the kids that go to college have to take remedial courses and only a third of our children increasingly in higher income families are being successful that allows this emto go to college. that's shameful and unacceptable and so we need to shift to them. >> i don't want to have to run for governor twice, i don't want the big, my legislature to leave the state and all these, you know, signs coming in and that i'm satan and all that. it's impossible to do. you get a lot of pushback, governor, don't you? >> you do. you do, but a lot of successful governors, governor daniels, jindal, have made really amazing proposals that the legislature has embraced that they're executing now and many other young governors are pursuing reform agendas.

this is not as partisan as people make it out to be. i wouldn't call it switzerland completely but it is a safe haven for people that want to move to a child-centered system so there's a lot of good things happening around the country but this needs to be something of national purpose, not another federal program but i think the presidential candidates will be talking more about this, i hope, and talk about why it's important to be competitive. we have to improve our k-12 system and challenge our higher education system as well. >> governor bush, i agree with you completely that the best way to measure it is to look at graduation rates and try and see people who are going on, children who are going on then to college and having success there, but when i heard the head of the teacher's union, the national teacher's union interviewed yesterday by chuck todd, she was saying part of the problem in chicago is the teachers were there and trying to fight for air conditioning for the students, they don't have air conditioning in august and it's hot to go. it does muddy the waters.

what was it about? >> if the average pay for chicago teachers before the strike was $71,000, and you add their pension benefits and their health care costs it approximates $95,000, that goes over $100,000 a year for classroom teachers, and the allocation of money is important in this. they spend more money in chicago than they do in many of the places around the country that sure as hell get a lot hotter. i can't explain why air conditioning doesn't work good in chicago. works pretty damned good in florida. >> governor we'll talk more about education. you make other good points. we get our fiscal house in order as a country and then we don't do anything about education, and labor is still going to be cheaper for our corporations abroad sometimes, and it's not going to solve the problem if we don't somehow, i know it's a chicken and egg thing but we got to do this, but to talk about the election, just for a second.

>> yes. >> you made a point about the republican party maybe needing to be maybe moderate some of its message. when governor romney talked about he was trying to talk about i can't get maybe 47% of the country, i can't really get their votes because they're on the receiving end of government largesse, he called it inelegant and yet i understand exactly what he's saying in terms of if you have someone promising everything and you're only going to tax rich people to deliver everything to them, i mean, that's very attractive to people that are on the receiving end of things. you're not going to get them to vote for you. is there a better way to moderate what you're trying to say there? how would you have said it? >> the way to say it for a country to be successful, all of us have to strive to be better and we have to give people capacity to be successful. the fact is that right now we have these big structural problems in our country, part of

it relates to education, part of it relates to our fiscal problems. we need to start solving them and grow our economy at a higher rate. if we were growing at the rate that governor romney proposes, 3.5% or 4% over a sustained period of time because we have an energy policy, regulatory reform, tax reform, the things that i think are pro growth, would you not have this argument about on the one hand saying we need to redistribute wealth and on the other hand saying people are too dependent on government. i guarantee you high growth will solve much of our problem. that should be where our focus is. >> i was thinking of something else i wanted to come back to you on that. we have to go. say hi to your fine son who was a guest host. >> you can call him p. >> we hope to see you again soon. >> all right. still to come, barry diller live, an exclusive interview you

can only get here on "squawk box." andrew is at the iac headquarters and he'll bring that to us in a little bit. up next, house majority leader eric cantor is here, it's your money, your vote, and "squawk" will be right back. a s. introducing the entirely new lexus es. and the first-ever es hybrid. this is the pursuit of perfection. at optionsxpress we're all about options trading. we create easy to use, powerful trading tools for all.

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things are definitely heating up. japanese coast guard vessels firing a water cannon to turn away 40 taiwanese fishing boats from waters japan considers its own. this is video from a japanese broadcaster, shows a coast guard ship spraying a water cannon while a pearl vessel blasts near a japanese ship. taiwan and china claim the islands. the islands are near rich fishing grounds and could be huge natural gas reserves. japan and taiwan have friendly relations but have had a long running squabble over fishing rights in the area, this is more what what we've seen in japan and china, fighting out in rocks in the middle of this area, too. things heating up here. up next, how majority leader eric cantor joins us here on set, we'll talk about the election, the economy and much more, and later, iac's ask.com closing its deal with the about

group. we'll talk with the ceos of iac search and ask.com. andrew is in new york and brings that interview and more when "squawk" returns but we are waiting for the leader. stick around.

welcome back to "squawk box." in the headlines a fresh reading on the housing market this morning, from case shiller home price index is expected to show a july increase of 1 for the nation's markets compared to a year ago, that number will be out at 9:00 a.m. eastern. an hour later the conference board's consumer confidence index will be out, getting more and more important as we decide whether we're on the right track or wrong track. the numbers improved a little to 37, right track, that's up from below 30. and san francisco fed president john williams, different guy i

think. when we say his name we should play "jaws" "star wars" "close encount encounters" different guy. he expects the fed to expand its bond buying program but end it before the end of 2014. williams says it will take more than a few months for the program to help bring unemployment down. okay, i wonder what cantor thinks of qe3. these guys have lost their mind. toys "r" us going to hire 45,000 seasonal holiday workers, 5,000 more than last year because of the internet and in-store stuff. at least 15% of those hired for the holidays got permanent jobs but he wouldn't say -- >> turnover. >> there was turnover, not like out of 40,000 you hire 6,000 new guys every year, that he's not what happens. get a check on the markets this morning, we have seen green arrows after the markets yesterday close the down slightly. this morning up slightly.

in europe we have seen some modest losses earlier when we were checking, at this point it's mixed, ftse up by 3 points, france and germany down slightly. in asia you also saw mixed but not major moves. people are waiting and seeing what's going to happen with the next round of economic numbers. we did see some improvement in the transports yesterday, largely because of what we'd seen with oil prices. transports had a horrible week. you saw oil prices come down to $91 and change. this morning they're up by close to $1, back around 92.85. ten-year note the yield has gotten down further, below 1.7%, at 1.692%, the dollar is a little stronger against the euro, just turned around, euro sitting it around 1.2934, dollar down against the again and the swiss franc and gold prices after a dip yesterday are up slightly to $1,769.20 an ounce. it is a busy week for gop

presidential candidate mitt romney visiting the critical swing states in a five-day tour. eric cantor, house majority leader and romney surrogate joins with us more. leader cantor we try to get a feel for what's happening with the election as it gets closer and closer. where do you think things stand right now? >> it is really close. i think becky that's really all you can say. there are so many polls that have got you all over the spectrum. i can tell you from virginia we've got polls which will demonstrate mitt romney way up, we ha've got polls that indicat somehow he's way outside the margin of losing, from my perspective on the ground and what i see at home across the country it's a tight race and we're going to run this thing through the tape and in the end i believe in 42 days you'll see mitt romney pull ahead and win this thing. >> virginia is an important state. what is the swing factor, what are people watching closely? >> look, listen, our economy and unemployment numbers in virginia tend to be a little better than average but one thing that is

particular and specific to virginia are these looming defense cuts. we have a very rich heritage of participation in the defense of our country in the commonwealth and with the ability for us to go forward as a country, virginia plays a very important role and when you see the president refusing to get involved with substituting these defense cuts it will have a real impact on the communities across our commonwealth and it means real jobs and it will mean real layoffs and i believe that will end up winning virginia for a while. >> it's interesting, though, if you're looking at this as a voter, could you pick anybody to blame for this as we head toward the fiscal cliff. why do you think it goes back to the president on this? >> when the entire debt ceiling debate culminated august 2nd last year, you recall the resolution at the time to avoid going over that cliff was that we put in place the agreement that the super committee was supposed to come up with the

remaining cuts that we were unable to do so at the white house. unfortunately, the two parties didn't get together, and instead we now have this sequestration in place that will become real at the end of this year, if there is no action. the house of representatives back in may put forward our solution said hey, these are the cuts that we want to put in place instead of the indiscriminate cuts that will impact our ability to defend this country but the president, harry reid, none of them have acted and it's the lack of leadership on the part of this white house honestly that has gotten us to where we are. if you look at any issue and i know whether it is energy policy, tax policy, policy to encourage entrepreneurs in this country, i just think the president has demonstrated a lack of leadership and i think that's why you're seeing the polls doubt his ability to solve the problems because frankly's in over his head. >> is there, am i correct in thinking a lot of people think that nothing can get done in washington these days.

am i correct in thinking the two parties don't even talk at this point? >> that's not correct, becky. i think that we have gotten to the point now, 42 days out from the election that folks are waiting to see some resolution but there are two big issues with he wrangled over last year we couldn't get beyond, those are taxes and really health care and this election is going to be dispositive on taxes, i can tell you that, because the president has made very clear he wants taxes to go up and again if mitt romney wins this thing which i think he will he's already said we don't think taxes should go up especially in a difficult economy. >> the president says it's only going up on rich people? >> again, look, he's said that all along, joe, and you know, look at the obama care bill. >> how great is it you get to keep everything but we're only raising taxes on rich people, medicare, we'll tax rich people, social security, don't worry, we'll tax rich people.

if you get the people he's talking to they're all going to vote for him. >> it is preposterous. >> that's the way you get elected. i was going to ask you about that, too, that's what romney was saying to the donors, infamous at this point. should he back away from that? when you heard it -- >> here's wh aeis what i heard where mitt and paul and our party is, frankly, we want to be able to afford a safety net for people who need it and what i think mitt was saying was you have got a growing number of people, frankly, needing the safety net or relying upon it, and our goal is to want less people to need that safety net, and get more people back in to work and be productive which is why what this election is really about is getting a leader who understands how to create an environment for jobs so we can help families and make life work for people again. that's really what we're talking about. >> eric, whoever wins, do they have a mandate, if the president

is reelected, is that a mandate for saying yes, we go forward with health care and forward with the tax plan? >> i this i there's no question that this is a mandate on whether you think government needs more tax dollars right now or we need to address the situation of the spending and n inc incurrence of more debt. we need to find a way to come together and have to act like folks do and their families and businesses and say normal reasonable people can disagree but let's find ways to work together and set aside those disagreements. >> if the president is reelected, how do you work with him and what is the proposal that's put on the table to try and move forward at some point? >> again in the hypothetical, if the president is reelected, i do think that he said he's not signing a bill that will keep taxes and the rates where they are. now we'll have to see what kind of sort of growth in revenue that he is talking about, and

what form that's going to take. i think mitt romney has said all along, too, that in tax reform, we want to wring down rates for everybody, but he's also said he wants to close the loopholes. >> he said he'll work with congress to figure out what that is. >> that's been the problem, the president has been absent on capitol hill. >> in the poll yesterday that came out, obama had a three-point lead with politico, george washington and battleground but within that poll there's the middle class voters and romney has a 14-point lead among middle class voters and they represent 54% in the country so he has different coalitions that get him up to the plus 3%, but for all the talk that we hear about trying to help the middle class, the middle class has suffered more than just about any other group of people over the last four years. meanwhile, how is it that the romney campaign and republicans in general have allowed romney's

taxes, and no one is even saying that he broke the law and yet that's been the headline week after week after week have been somehow the republicans have been railroaded into talking about this when really 8.1% unemployment, that's not helping anyone. 47 million people on food stamps, those are the issues. the middle class is not being helped right now. >> what the middle class is concerned about is what most people in the country are, worried about how they're going to pay for their kids' college tuition, how they'll save for retirement, how they'll deal with health care costs and there are a lot of working families having difficulty getting through the end of the month. >> how do you put the tax discussion to bed with mitt romney's own personal taxes? you need the media to back down or something? >> it is what it is with the media. >> you got to beat obama and the media. >> that's exactly right. you're running against two people. >> no truer words said, joe. it is the media has constantly, if you go look at the trends in

this thing, they have called this election over and want to write the obituary for our side and it's just not going to happen and again, i think that's what the outcome of this election is going to prove that in the end, the middle of this country is really for a much more aspirational, hopeful america. it is not for trying to equalize. >> fourth quarter, romney is not late in the fourth quarter down by two scores at this point? >> no. >> you think it's halftime up, maybe down by a safety? >> listen, i don't think we're down. i think mitt romney is going to win this thing and again living in a swing state t is about small business job creation. what people in the middle class in this country want is they want jobs, they want jobs for themselv themselves, opportunities for their kids. they don't want the government coming in saying everybody has to live a certain way, we have to have socialized medicine and have prescriptions from washington handle everything. that's not what we want. >> are regoing to go over the

fiscal cliff? >> i don't think we're going to go over the fiscal cliff. we got to win this election first and we've got to make sure that we continue down the path that really the house of representatives has tried to go for the last two years which is trying to solve the problems. we came in and said we're going to tell the truth, we're not going to sweep the problems under the carpet and put some solutions on the table and i think the election will demonstrate we're ready to do that as a country. >> but not going over the fiscal cliff may very well require compromise from each party. are you ready to compromise and would you do that to keep us from going over the ifisical cliff? >> becky, we have always been willing to sit down and talk about how we can cooperate together, and we have always said to the president, to harry reid and others, listen, if you feel it's so necessary to add to the tax burden of the working families and small businesses of this country, at least join us in fixing the problem, because otherwise you're asking people to pay in money while you're

digging the hole deeper. that will only encourage more inc incurrence of debt and we'll end up paying more of an interest bill than we will in terms of investment for the future of the next generation. so we've always said we'd be willing to sit down and talk and demonstrated that and unfortunately there's just been no willingness to put a solution on the table on the part of this president, and again, the next 42 days really i believe the folks in the middle and those who are undecided are going to look at the president and ask where the leadership is and go and vote for mitt romney. let's get over to andrew, he has a preview of what is to come, live at the iac building in new york and andrew, you have a special guest coming up for us. >> hey, thank you very much for that, becky. we have barry diller our exclusive interview with him coming up at 8:00 a.m. eastern,

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welcome back to "squawk box" this morning. we're live from the iac headquarters here in new york. we got barry diller coming up at 8:00 a.m. but first we have two very interesting and important people here at iac, i'm going to start here, we have doug lees, ceo of ask.com, and we have jerry levin. >> joey. >> i said jerry that, kills me, as ceo of iac search. i want to talk about this about.com deal, you just bout about.com from the "new york times" $300 million. about.com has been the hot potato ultimately people have not wanted to touch. went from prime media, went to "the times." it's worked out on the way up but invariably people seem to sell it later for less. >> it's been the hot potato

we've wanted. we coveted the asset for a while. we told the "new york times" we'd want it if they were interested in selling it. we read about it in the press it was being sold, and we sent in the letter to "the new york times" and said we're interested. >> did it in five days, almost sold to answers.com and you jumped in. >> we got a call tuesday morning that said if you guys are interested, you got five days. and we signed a deal on sunday afternoon. >> doug, what is the strategy behind ask.com now. it shifted. it used to be, and joe will appreciate this, ask jeeves. you've dropped jeeves because we had a trademark dispute over my driver's name but what are you doing? >> we were competing against the search, part of the search wars. google has won and we looked at what our users were using us

for. they've used us for the same thing, finding answers to question which is different than searching. searching you want links. on q&a you want an answer. when we switched a year and a half ago and said that's what we're going to make our focus our business started to explode, we started to really take off. >> people are asking questions online, getting answers. >> sometimes they ask them on google and find their answer on ask.com through a google search. >> you think about your competitors as whom? >> answers.com is certainly one and yahoo! answers is another. folks who are in the q&a says, kor has gotten up but they're not a mainstream company at this point. >> would you want to own them? >> i think we got a lot to digest right now. >> they don't have any revenue so probably not. >> you're still using the jeeves name in the uk? >> for now. it sort of has more residents in the uk still. >> joey, on m&a broadly, what is

the biggest deal this company would do? >> we have the capacity to do a very large deal. >> you have nearly $1 billion in cash. plus you got the stock. >> plus we got the stock. our appetite for huge deals is limited. we're nimble and opportunistic on deals. we saw something where we knew we had a competitive advantage as a buyer and took advantage of that. where we see the opportunities we'll do that and where we can act quickly we'll do that. >> the tech space overvalued right now? >> we have a lot of time finding, we have a hard time finding assets at the right price for us. >> guys, we're going to leave it there. thank you very much for this conversation. i'll send it back to becky and we'll be back with barry diller at 8:00 a.m. >> that sounded an awful lot like a qualified yes but they have a hard time finding things at the right valuations here? >> i think it's a qualified yes.

you want to expound? >> it's we're very dilined. we like to do teas like we're the smartest guys in the room, at the table where we have a unique advantage and that's where we'll deploy our capital. >> that's what happened with about.com, we saw more synergies than we've seen in a deal for a long time. >> i'll take that as a qualified yes and we'll see you soon. becky we have barry later. >> andrew, thank you very much and thanks to joey and doug. coming up as andrew mentioned we have his interview with barry diller that, will start the top of the next hour. plums the cnbc all-america survey is out. steve liesman will join us with more. his personality is so mag t magnet magnetic he's unable to carry credit cards, even his enemies list him as their emergency contact number. he never says something tastes like chicken, not even chicken. he is the most interesting man

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animal orchestra with the nfl music, after last night, wasn't it sabol, the guy who passed away at a young age, that music. after last night's debacle, that is the water cooler story of the day and that is seattle's win, "win." >> yes. tesla cut its forecast for 2012 revenue citing a slower than expected rollout of its model "s" sedan. it expects full-year revenue in the range of 400 to $440 million. >> we've been trying to get ilan musk. >> i drove the little one. i'm not that big but it's very small but no sound and really fast. really, really quick. it's cool but you know, really hard to get in and out of it that one. the home builders d.r.

horton downgraded, lennar was downgrounded and toll brothers downgrounded big moves after lennar's earnings and look at the way the stocks performed. marriott international downgraded to market performoutperform, based on valuations and economic concerns. when we come back, barry diller of iac will join andrew live from new york, there they are talking about it right now, that's live right after the break. ne, thor's couture gets the most rewards of any small business credit card. your boa! [ garth ] thor's small business earns double miles on every purchase, every day! ahh, the new fabrics, put it on my spark card. [ garth ] why settle for less? the spiked heels are working. wait! [ garth ] great businesses deserve the most rewards! [ male announcer ] the spark business card from capital one. choose unlimited rewards with double miles or 2% cash back on every purchase, every day! what's in your wallet? [ cheers and applause ]

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welcome back to a special hour of "squawk box," our guest host is a media mogul who ran paramount and fox as the current chairman of iac, barry diller oversees brands like match.com, ask.com and college humor and serves as chairman of expedia and trip adviser. >> why should we introduce a new product where we're selling millions of the old ones every day around the world. we deserve a break and that's why starting today apple is going to start coasting. >> we'll join us for an hour from iac headquarters in new york city, the third hour of "squawk box" starts right now.

welcome back to "squawk box" here on cnbc, first in business worldwi worldwide. i'm joe kernen along with becky quick. andrew will join with us our xw guest host barry diller, chairman of iac. we'll get to barry in a minute. we had to go to him, for him to be guest host. has he been to -- new jersey and barry don't seem -- >> even mohamed goes to the mountain. >> we've been to see him but i can't see barry come over here. >> we've begged and pleaded. >> right. is it new jersey? is it us? >> maybe a little bit of both. >> he has a newer head quarters. i think it's the jersey thing with him, he's so cosmo, so urbane. >> not a bridge and tunnel crowd. >> no, he's not i don't think.

>> i don't think he is either. we'll talk to him in a moment. caterpillar cutting 2015 earnings guidance to $12 to $18 a share. it warned of a bigger than expected fall off in demand for its products over the next few years because of weaker commodity prices. caterpillar stopped short of forecasting a global recession. there's definitely more to the story. we'll talk more about it later. the shares were down in aftershowers trading by over 1.5% at 89.45. also apple supplier foxconn chinese production company resumed action after a brawl shut the factory down. foxconn declined to say whether the one-day suspension would affect production of the iphone 5. and toys "r" us announcing plans to hire 45,000 seasonal employees to staff its stores and distribution centers this holiday season, up from 40,000

last year. earlier on "squawk" we spoke to the toys "r" us chairman and ceo, gerry storch. >> hiring is up because of innovation, we added free layaway, we have hot toy reservation which will appeal to the parents in the room because you can reserve any toy on our top 50 list between now and halloween and we'll find it for you, we'll guarantee that you'll get it. >> it's just figuring out what the hot toys are between now and halloween. high performing seasonal employees have the potential to become full time workers. 15% of the workforce last year stayed with the company after the holiday ended. u.s. futures are higher today despite news from caterpillar. dow up by 34 points, s&p over 3 and nasdaq up by about 8 points. in europe the markets are mixed but barely budging, ftse less than 2 points and cac in france

down by 8 points and germany dax 13 points. and again, kind of people waiting to see what the next economic indicator is. in case you missed it the water cooler story of the morning is a controversial call from last night's nfl matchup between the green bay packers and seattle seahawks. the packers were winning, this is the last play, winning 12-7 and on the game's final play, seattle quarterback russell wilson threw a hail mary pass toward the end zone and looks like green bay's m.b. jennings makes a reception with seattle's golden tape attempting to wrestle the ball away. one signals a touchdown, the other an interception. the ruling on the field is touchdown and following the multiple replay showing a wrestling match wayne elliott came out from under the hood and said the ruling on the field stands, seattle wins 14-12 in ais that will be discussed and disputed for a long, long time and the defeat is not sitting

well with packers fans, the bitter headline from "the milwaukee journal sentinel" packers interception gives seahawks the victory. >> you should see what they've been saying about it on twitter. >> yes. let's go to iac headquarters in new york. andrew ross sorkin is there with our guest host for the next hour, hello again, andrew. >> thank you, mr. kernen. i am here with the chairman of iac, barry diller and we are very happy to have you here for the hour. we have a lot to talk to you about, about 100 issues you're trying to revolutionize the tv business, trying to revolutionize -- >> whatever, start someplace. >> book business, we can talk about all of these things but i wanted to start with facebook. your stock is up 200% in the past four years when you think about what's happening after the spins, 30% in the past year, that's the good news but when i think about facebook and i think about groupon and when i think about zynga and all the other companies that put themselves frankly in the same space that

you would, i'm curious, how you see the landscape right now. >> well i think first of all i think that facebook is, it's like this is not a national tragedy. they sold their stock high. if you're going to sell stock, sell it high. >> hold on, so you don't think, if you were facebook, you don't think of this ipo as a failure for facebook? >> no. i actually don't. i think if you're going to sell stock and somebody wants to buy it at a price and that price is not a price you dictate, but demand dictates, sell it to them now. the issue for them going forward is, the only problem for them is internally, they probably have some people who say well, i have options at this and whatever. they can reprice those. they can grow from -- they can grow long-term, which is by the way anybody understood anything about mark zuckerberg, he has probably a longer term view than

most people since he's a child. he's only running the company for long-term and i think the people who bought it at the ipo were either speculating, in which case they deserve whatever they get, good or bad, but it's of no national importance, very few people i suspect were in that stock for long-term. mostly it was traders, and therefore, i don't have much sympathy for it and i think the idea that it was a failure, i don't know how you could say it's a failure when they got an off -- look, the purpose of the market used to be to raise capital, to build businesses, right? they raised more capital than they would have otherwise. >> with the underlying assumption that the stock will hopefully over the long-term go up, if you came into the stock -- >> over the long-term. >> what do you think the long-term is going to be? >> i think for facebook -- look,

facebook is doing, when you think about it, everything right, because what they are doing is insatiably working to make their site better and get more people to use it, and get them to use it more. that's what they do every day. they also, i mean but secondarily, they are of course looking to get revenue from it, which is a natural outgrowth of taking care of your customers. they're doing everything right for their customers. >> so mobile, that seems to be the big conundrum for facebook and frankly just about everybody across the world that you live in, is it going to work ultimately and how? >> mobile? >> mobile. >> what do you mean is it going to work? >> in terms of advertising and revenue. >> yes, eventually. look at the very beginning of things, you don't have the paths really down naturally at the very beginning. look at the very beginnings of the internet and how internet usage was this little closed

loop with aol. we've had a huge share of the market. it takes a long time to work through these things. mobile, the only issue for mobile is the form factor, is fairly small. getting bigger, but it's small, so your ability to put a lot of stuff on the page, advertising opportunities, et cetera, is more limited, but that forces you to therefore create new ways of getting revenue. >> so okay, let's take facebook out of the equation. otherwise, when you look at the value, when you look at acquisition targets are we in a bubble, when you look at a zynga, groupon -- >> they're all overvalued. >> all overvalued? >> absolutely, sure they are. >> would you own stock in any of these companies, including facebook, by the way? >> i would -- first of all i don't own stocks other than the ones i'm engaged in, so yeah, if i were a stock owning person of companies, whatever, yeah, i

would absolutely buy facebook now for sure. but the thing is, when you have multiples, double, mid 30, 40, 60 times, where are you actually going to say there's value? there's only value there in such prospective takes on the business. it's awfully hard to justify the private valuation gain is more absurd, it's three or four guys in a room saying okay we're going to take more investment. >> why is that? >> let's make up what the values are. >> everybody i talk to says we're in a bubble. if we're really in a bubble, why are these prices going up? >> first of all i think we're -- look, we only have one bubble experience in the internet, and if so, if you're using that as the standard, the 2001, we're not in a bubble. but look at what has happened to

a lot of these stocks. they have come down. they have certainly not been robust so i think a little of the air is coming out of that bag but so long as you have more money flowing in to rounds of financing for essentially the finance companies where they get to say we have no revenue but somebody wants to pay us at a $200 million valuation, we'll take their money, next time they sit in the room, one more person's there, he's at 200, oh, i want 400. it's all an internal game. so it doesn't have any -- it doesn't have any, what you would really call value metrics. >> barry, we're going to slip in a quick break, you know about advertising. we'll do that and come back and talk about what's happening in the tv business and book publishing business when we return. we'll have barry and more in a

little bit. >> andrew, does barry have an ifb? >> barry does have an ifb and i think he can hear you. >> barry, you can say there's a bubble everywhere else but iac. you can say that. i think you were hesitant to say that. you just said everything's overvalued, groupones, zynga, then you thought about it and go, wait a minute, someone might think is iac. no, no, there's no bubble. >> that's not what i did. i don't like the term bubble because it -- >> semantics. >> -- references to me very specifically a period but are valuations cracked? of course they are. >> how about new jersey? have you been to new jersey, barry, ever? do you remember the last time? >> i'm not saying this on the air, mr. joe, but i go to new jersey only, only and limitedly to teterboro airport. that is the only [ laughter ] that's the only pathway i have

to new jersey and i cannot divert. >> i'm totally slipping because that should have been -- >> no, i don't think you. >> i should have known that. the last in-flight movie you saw had just come out, it was "sound of music"? >> no. >> that was the last commercial flight. >> "sound of music" was in the '70s? i don't think -- i think i was, i think i was on gulf western air by then. >> teterboro, i'm slipping. i should have known that. >> we will more from barry and andrew in a couple of minutes. also we have more exclusive results from cnbc's all-america economics survey. surprising numbers with big complications for the presidential election. >> don't let him get away with that, we can't let him get away with that. [ male announcer ] what if you had thermal night-vision goggles,

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welcome back to "squawk box," everyone. let's get back to andrew and our guest host, barry diller, who are both in new york city and barry we're trying not to take it too personally. joe and i both live in new jersey. >> but you're right, the drive through parts of it is not that, you know, i hear that music. >> i think new jersey is beautiful, please, but you know,

but you know, i'm here. thank you. i thought it would be nice for you -- >> we will come to you. >> -- i thought it would be nice for you to have a location shot. >> the beautiful iac building in manhattan this morning, with by the way a great screen behind us, the highest resolution screen i'm told in the world. >> it is. and it is also extremely low energy. >> it is extremely low energy. we were talking during the break and i want to get your last thoughts on the issue which is facebook. you made the argument during the last segment mark zuckerberg who always reprice his shares. i said doesn't that feel a little icky? >> well, in this case, i actually think over a period of time i don't think that's wrong. let me finish, the entire business reset. if you just reprice options literally to give your employees a better shot than the people who bought the stock retail i

think that's immoral but if in fact you have a situation where the entire thing has reset then i think it's rational to do so. as a general practice i think it's horrible. >> at facebook's stock right now you're a buyer? >> yes. i'm a buyer because i don't buy but yes, would i buy so i were so buyingly inclined, yes. >> let's talk about the book publishing business, just a week ago you decided to up-end the business with a new company, getting your business with scott ruden, to create a new electronic book publishing empire. >> yes. >> going after amazon? is there a play against jeff beisaa? >> to go against amazon would be truly a fool's run. i like businesses in transition, first of all. if ever there were a business in transition, it is publishing, which is to have more changes in the last couple of years and the next five years than in the last

100. it's in trabsition to digital and also controlled by six publishing houses that have been in business essentially for 100 years give or take, so they have all that legacy, they have all of those practices that if you do practices again and again and again they become osified. >> do you consider -- >> so i think that, sorry, i should let you do theinterint interlocutory here. >> wow. >> i think if you have a situation where there are all of these legacy companies and the businesses in transition, if ever there was a thing that i would think for myself that intrigues me, that i'm really curious about to enter, now is the perfect time particularly with the people we're engaged with. >> do you see this as a big business opportunity? the book publishing business, even when things were great was never great. >> no, it was not -- again, it was -- by the way, the amount of

profits we're in a different age where profit count something on a different scale than it used to be, the publishing houses had a decent return over a period of time, never huge businesses but digitally when you don't have to deal with book stores, when you don't have to deal with printing and all of that stuff, by the way, we will print some books, too, we're not against printing books but when you don't have to do that, you could build, there's no question people like reading, and like books. >> does amazon have -- >> that's going to grow. >> does amazon have an unfair monopo monopoly? how do you like at the anti-trust lawsuit? >> the lawsuit was crazy but the pricing was crazy. to get into the pricing would have all of your people even

though they're just waking up fall asleep immediately. the pricing was so complicated and so dysfunctional between agency pricing and retail pricing et cetera that the settlement so even more stupid than the actions that precipitated it, said they're raising the price of books. but amazon, other people are going to sell electronic books. once you can do it digitally, there are no barriers. that's the great thing about a digital world. >> that's the piece you're going to try to get a piece of. we have to slip in another break since you do know the world of commercials. we're going to come back to barry in just a little bit and also steve liesman coming up with his all-american survey in just a little bit, when we return from this break. looking e to put your cash? here's one you may not have thought of -- fidelity. now you don't have to go to a bank

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welcome back to "squawk box," everyone. we've got more results from cnbc's exclusive all-america economic survey. cnbc's steve liesman joins us and steve you've got some explaining to do about the numbers. >> i know we're going to delve into this mystery. so many americans think things are worse off than they were four years ago and so many americans seem to be supporting obama as the one to fix it. let's go into some of the possible reasons here. first of all let's show you the top line results here.

this is what we showed in june, we asked a very end of the economic economy but not the same, romney had a six-point lead. our september survey, 800 adults, same people did it, shows a nine-point lead for obama. how can that be? let's look at some of the potential reasons. could it be slightly better economic numbers? no, they don't show up in the data. could it be somewhat better stock market? we do show some bump up in that, not enough to explain the results but three reasons look like they could stand here. change in racial support, the personal appeal of obama versus romney and the tax issue. let's look at the obama support june versus september. slightly different question, not entirely comparable but the magnitude is fascinating. 49% supported obama in june, 64 now. african-americans, 70% to 93%.

even if the numbers are half right they help explain some of the movement and watch what's happened to whites here, 27% obama has increased his support. he's consolidated his base, our poll shows romney maintained his 80% support among republicans and he maintains an advantage among independents. the politics of personal, they want romney to invest for them but don't want them to coach their favorite team in the championship game or hang out with him, 5-2, obama wins the personal. let's go on to this issue of taxes and what you can see here is the rhetoric, whatever you want to call it obama neutralized romney on the tax issue. you can see it's reversed by income. if you have income over 75,000, only 34% think romney will increase it, but if you're 56% thinking obama will increase. coming up at 10:00 we'll get

american's opinions whether it's time to put money in the market and more results from the survey on cnbc.com. so becky those are three potential reasons why, taxes, the personal, and of course the changing racial social in the electorate. >> steve we should quickly mention that this is something where we're not looking at likely voters because you can't skew the survey do you all the time. >> there's no head to head comparison, this is a support on the economy, a financial and economic survey, that's why our results may not be comparable with others but it does show a general trend of what people in america think about the economy. like our all-in-one trade ticket. we put strategies, chains and positions all on one screen. start trading today with optionsxpress by charles schwab. ♪ [ male announcer ] introducing a stunning work of technology. introducing the entirely new lexus es. and the first-ever es hybrid. this is the pursuit of perfection.

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welcome back to "squawk box" everyone. we're going to be keeping an eye on shares of staple this is morning. it's announcing a savings plan designed to save $250 million a year, celebrating the closing of 15 u.s. stores and increasing investments in its online businesses. let's get a check on the markets. j.j. -- that's some other show you're j.j., isn't it? >> i'm joe -- >> when you are athey studio are you j.j.? >> what would you like me to do, joe? >> joe kinahan is with us on set, chief derivative strategist at t.d. ameritrade.

one of the things, joe, i don't know if you have an opinion on this, i was trying to figure out with qe3 we're waiting with the markets going up, waiting, they're going to do it and finally it happens and you almost wonder whether you sell the news on that but they haven't bought a single, haven't, they're going to spend 40 billion a month. shouldn't that even if it's in the market, even if it's already discounted in the market, shouldn't that physically be able to lift it as futures unfold? >> you would think. >> will it? >> i think short term it still might. in the spex, the 1500 call is creating a lot. we're still like 1456 level so i think we have a chance there. the options actually are pricing at about a 33% chance of that happening. what really concerns me is what we've seen recently from fed ek, y fedex, caterpillar, the railroads. that's the biggest warning sign to me out there because they're the ones that move the economy

time and time again and when they're telling us there's a problem, we have to be concerned. >> i'm confused by caterpillar. they're looking out to 2015, they don't think that china is going to be a total collapse, they think it's going to look a little better by the end of the year. what do they see in 2015 in terms of commodities prices? >> i'm not quite sure myself. to joe's point i hope it doesn't take qe3 that long to work but i'm not quite sure why it will take to 2015 and it was sketchy to read through fairly quickly in order to see that but again i think as we head into next year, besides the fact that the european situation rears its ugly head every six weeks the election will be over so theoretically the country can get that going. the major companies that move products are giving you the warning sign i think that's the biggest heads up you can get and if it were just caterpillar wouldn't be that big a deal. but fedex, u.p.s. and the railroads, really, really concerned. >> that's the one thing that

broke down. i wonder what the dow transportation average in this high frequency trading market, do any of these technical things still work with the public gone and with institutions mostly calling the shots and a lot of that high frequency trading? can we count on any of the stuff? >> i think we can. >> then we're in trouble with the dow transports, they're down for the year. >> they are and with the warning sign going forward, there has to be some sort of a reckoning so to speak between what's going on in the s&p 500 and the dow and what's going on with the dow transports and one of the reasons i'm concerned as we head into 2013 and i also believe that after the election, again, i deal with retail traders every single day. i think you're going to start to see more migrate their way back into the market because again, a little bit of it is a hangover from 2008, wie had some people back in.

what's going on in washington has confused the retail traders so much. >> they want to sit out. >> where am i at? as they've seen many ceos come on the show talk about just tell me what the rules are going to be and i can do something around it. that's going down to the retail level right now where people aren't sure what the rules are going to be, where they should put their money because the ceos are coming on not saying they're 100% confident. >> all right, you can call me ray, jay, joe, j.j. kinahan. you know what's going on -- i think washington had a better record but -- >> chicago white sox. i grew up near wrigley people. >> fat people who can't play the game batting for the pitcher. why did you let -- it's a disgrace, really. i still don't -- >> we can sit and argue about that all day. >> all the strategy that the pitcher, the manager used to have with do i put in a sac or this, it's all gone because of the d.h. washed up fat guys still able to

play, they can't even run. >> he's one of your former guys. >> 1983, stick with that. >> pitch-out, stealing, pitcher coming up. i mean it's -- you know. >> you can't pitch out and steal with a d.h.? >> no, not as much strategy. you ruined it. orange baseballs. >> thank you, j.j. >> good to see you back. when we womcome back much m with barry diller, he has recognizable names like match.com, about.com, "newsweek" and "the daily beast" and chairman of expedia and trip adviser. andrew is there with him and he'll have more after this. now, that's what i call a test drive.

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welcome back, everybody. let's get back to andrew and barry diller in new york city. andrew, why don't you take it away. >> thank you, we're back with barry. barry, we haven't talked about your efforts to up-end the tv business. you have not made a lot of friends with the new products called aerio, on an ipad, everybody can get not cable tv but broadcast tv over the air right here, you pay monthly. >> yes. why am i doing this. >> >> abc, cbs, nbc, fox, univision are suing you. >> entrenched providers, concentrated providers. >> we had the "today" show during the commercial and almost put on cbs.

>> it would make les a little more angry with me than he already is. i'm not interested in up ending or disrupting. i spoke earlier about things in transition, i want the internet to essentially move the centricity from wires and boxes and all sorts of untactile remotes. >> the networks would say you are stealing their content. >> i'm stealing their content to the same extent that radio shack sells an antenna that you put on the roof. are they stealing content? excuse me. what nobody wants to insert here is that broadcasting started as a free over-the-air advertising supported business. >> you're not offering this for free to consumers. >> no, the platform is we're charging essentially for the dvr, in other words because what we can do is in the cloud, so you don't have to have another

set top box. >> just to explain to the audience the tv signal broadcast signal is coming over the air, you're grabbing that signal. >> we're not grabbing it. we are doing our god-given american right to have free over-the-air television without an intermediary. >> but paying $12 or more for it. >> but for a subscription service you get 80 hours of a dvr in the cloud? i don't think that's exactly robbery. compared by the way to $150 monthly cable bill? >> is there a compromise to be had here? is there some kind of deal that can be made? you guys are in lawsuits with each other or rather they are suing you. >> yes they are. >> is there a meeting in the middle? >> yes, i'd like them to withdraw. i think it's this simple, communications law says that you send a signal out, if somebody can receive it, that is perfectly within the rights of man. >> but you're doing it en masse,

and there are huge carriage fees at stake in this. >> when you say en masse, every subscriber we have essentially owns a little antenna, just like the big radio shack antennas, a little antenna in our little server forum and it goes through the internet and i like the idea of the internet being the place that you get rich video, because i think that the more you drive it through that unlimited optionality world, the better it's going to be for everybody. >> if you don't do it, do you think apple will? apple tv, what do you think the future of that may be? >> they are the ones who are going to tell us. as you know, they don't tell you anything until they're absolutely ready but they certainly want to play in television. >> jonas just wrote a piece apple peaked in the post steve jobs era.

>> so stupid. >> where do you stand? >> i stand saying that is really stupid. >> when you look at their stock and how much they're valued ought, how do you think about that issue in. >> look, i can't do, i'm not looking at it in terms of valuation but do i think that apple has such very much earned, they have such a relationship with the consumer that they get and dedeserve a premium and they have a very long pipeline of products and i think they're money good. >> money good? could they become a trillion-dollar company? >> they could become a 40. you're dealing in areas, why would i -- are they going to grow? yes. i mean, will they grow into their valuation, which is actually, you know, in terms, it's not that wild. they're multiple. they're an incredibly, they're a fantastic company. >> surprised by any of the mistakes or miscues?

the new iphone came out, people constantly talking about the mapping service not working, related to what google is doing? >> one of the things you know about the internet, it's not like you make a movie when it's finished, you really don't talk about it anymore because you're not going to make any changes. on the internet with a product like that, you. you t put it out and make it better. why everybody is crabbing about the idea, to me i love that apple is going into the mapping business. why? because google has close to a monopoly on it and we who buy their services for their expedia, trip adviser, et cetera, endless, et cetera, who used to pay $100,000 for a license, they now say give us $2 million because they're the only store. i want multiple stores >> what is your relationship like with google these days? >> good. >> are you happy, are they the net winner? joey in the last segment in the 7:00 hour was saying look when you think about ask.com and the way we've had to position it because google ultimately was

the winner >> there's no question. google, the one thing that does constantly amaze me is how after they figured out how to deliver search in a way that blew everyone else away how efficient their advertising system is, how liquid it is, how efficient it is, how brilliantly run it is, and people who say google squanders money here and there and does all of these other things, et cetera. i'll tell you what they really do, they are a vacuum cleaner for revenue, and it's an unbelievably well built machine. >> given what you just said, how do you compete against that. you're in the same business in many respects. >> it's an almost winner take all, if you have 65% or so of the market, but we've been able to build ask as an alternative for essentially q&a, where because we specialize in that,

we could do at least we can do, we would argue, a better job, and so we can play, i mean, do i have any delusions, which i did kind of before i spent $170 million marketing ask.com, trying to gain market share, which we utterly fail that. we held on and built it in the last year or so but the idea of thinking you can compete against what is the verb, google, is stupid. >> marisa mayer, newly installed at yahoo! supposed to come out with a memo to the staff laying out a new game plan. >> she likes to write. she likes to write. >> can that work? >> sure. they have an audience. i mean, the one amazing thing about google kicked like a bad trash can over the last several years, internally, and externally, is they have -- >> you're talk yahoo!.

>> sorry, yahoo! not google. yahoo! has about 400 or 500 million people in their audience, and the fact that they've been able to hold on to very much of it is the only thing to pay attention to. they didn't do very much with it during all of these development years they squandered their portal centricity. i think it's definitely a good game. >> good game, you wouldn't have broken it up? some people wanted to take it for pieces. you think there's a long-term strategy for this company? >> well there's an audience, and if you have audience, you ought to be able to figure out ways to serve that audience to their benefit and your benefit. there's no barrier to that. what happened to yahoo! is it really was kind of a classic management and more importantly board. the board members of yahoo! in that process, i don't know what i would do with them if i had my

hands around their scrawny necks. >> we are going to send it back to joe for a moment. i want to get more on yahoo! and ask you about aol and get into some politics in just a moment. joe will probably enjoy that, too. joe, back to you, my friend. >> okay, barry made some comments on our air about the business environment, it was a while ago, i don't know how he feels now. i know about his wife but not him. coming up, we'll head down to the new york stock exchange next. ready or not the stock of the day is coming up. you're watching "squawk box" on cnbc. first in business worldwide.

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let's get down to the new york stock exchange where jim kramer is joining us now. when you read that caterpillar stuff, did you think, wow, it's 2012, they are talking about 2015, it is a long business that they take it in a long viewpoint, but did it make you wonder where commodity prices would be in 2015? >> these companies put the five-year outlooks and have to

revise them periodically. the near term didn't sound so good for caterpillar, but if you go through page by page what they are saying, they are saying, we are not as bad a company we used to be. even with the not so rosy worldwide forecast, we are still going to make a lot of money. it was not nearly as negative as diller's comments about new jersey. which stunned me. >> i think barry might have thought, and when you're on a remote like that, i think he might have thought i was in break, which is a trick i use. hey, barry, it sounds like we are off and you get some of the best answers, but wasn't that great? he's been to teterboro. >> i know that look was substantive and said facebook is good. but i'm sitting there saying, i live in new jersey, frankly this is -- where is chris christie right now to rebutt the idea that the state doesn't exist? this is not a country in the mideast. this is a real state that's very close to where we live. >> jim, there's one crummy part

of the turnpike that says hydro, which was on the "sopranos." but summit, melbourne, that's the best bedroom community of new york city. >> great school system. look, barry doesn't have -- can he just say, look, one of the great things is a transportation hub? i'm going to jump a plane. >> he is smooth. i think he wants to say something now. >> barry is right here. >> i don't know what kind of listening device you have, mr. jim, but i said wonderful things about new jersey. i think new jersey is beautiful. i said that full stop. i did not criticize the school system, the governor, or any activities in new jersey whatsoever. >> he loves teterboro. it is beautiful. >> let me give you a key to the state. it is trenton, i know you think whatever trenton is making the world is taking. >> i like cory booker allot. >> yes, i do, too. when i was allowed to contribute i did fund-raising for him.

he's a terrific guy. >> you have to get out more, barry. you got such a great life in new york. if you have been to wear jim is in summit, it is really nice. i know you haven't been to summit. you have? >> excuse me. i went to michael forbes house to go motorcycle riding. >> he's average guy. that's the average new jerseyite and garden stater. >> thank you, guys. see you in a few minutes. when we come back, parting shots from barry diller. stick around. we'll be right back. tomorrow, a "squawk box" double play. two hours with pimco's ceo and the head of the national economic council. we'll talk the latest big easy and the countdown to the november election starting tomorrow at 6:00 a.m. eastern. look at these streaming charts!

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people over time go through the same phases of development, an urbanization has been true of humans for centuries. let's get back to andrew in new york. time for parting shots from our guest host today. andrew, you're going to take things political now? >> yes, we have saved the best for last. barry, when we talked during the commercial you said how

frustrated you were with what's going on in the world right now. >> i'm not frustrated but i'm ashamed how much we tolerate spending $2 billion for commercials that are entirely negative that don't deal with anything. we don't deal with any serious issues when we actually have serious issues. we are all wandering around essentially boring each other now when we talk about what's happening with the presidency. at the end of the year we have a big topic to handle. i wish the other guy were a guy but i don't think he is. >> we were just talking about jack welsh off the air. when you see your friends, many of them on "squawk" and other places talking about how the president has done an awful job for business. you say what? >> i don't think he has done a good job for business, but really, in this situation, you have to consider the

alternative. and i don't like the alternative. >> because? >> just look at the last month. why would i like the alternative of somebody who cannot get -- i mean, to run such an inept, depressing campaign is grounds for dismissal. >> and you wouldn't argue that over the past four years there are thing that is the president has done that would be grounds for dismissal? >> yes, absolutely. but again, what's the alternative? >> when you think of -- >> if you gave me mike bloomberg -- >> you would vote for mike bloomberg? >> vote, i would enthrown him because he's a good executive. >> what do you make of the argument about uncertainty. where are you on the economy needs to be politics right now? >> our businesses, there's no sector of businessing, even housing is journeying out a little. >> what about the jobs picture? >> the jobs picture is ecstatic.

it is just going to take the obsession over 8.1, 8.3 x number of jobs created in this particular year. >> do you blame obama or give him credit for the jobs number? >> i give him credit that he rescued -- bush rescued it too, by the way. also as probably the biggest savior of the system. but, in fact, he did put in policies that did keep us from going deeper into a very bad ditch. >> and that's your measure. >> well, my measure is that jobs will come back over a period of time when investments start to get played down, when demand starts to cook a little in probably new businesses that haven't been invented yet. >> barry diller, we need to thank you for a wonderful hour. thank you for doing this. we'll have you come across the bridge next time. >> i'll go, i promise. i'll be right there in your